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The large majority of people are going to get their refund checks and promptly spend them on a variety of special gadgets and toys that may improve their quality of living, but won't really help them in the long run.

However, if you were to get a major tax return back and you were to use that to pay off credit card bills, then you will find a substantial increase in your month to month quality of living. The reason is simple, lets say that you are getting $3500 back this year, which is what I received, then you think about all of the credit cards that you have, say you have 5 that add up to $3500. If the minimum payment on each one of these 5 cards was $25, then you would end up with an additional $125 each month. Sure this doesn't sound like a lot of money, but that's like having a pay raise. The other benefit of this is that you would have a better credit score, which would allow you to refinance your house, your cars, whatever. This would mean that you could save even more money. Sure, you just lost $3500, but you gained so much more, especially over the long term.

If you don't really have any debt, consider your hand at investing. If you were to take that money and place it into the stock market, you could turn that $3500 into $5000 and who knows, you could keep on going from there. There are other types of investments that you could consider, such as a certificate of deposit, some sort of a fund, whatever you want to do really, it is completely up to you.

Sure I realize this isn't realistic in the eyes of most consumers that are just gadget crazy, but taking simple steps such as this really help to remove a great chunk of your overall debt, and allow you to breathe a little easier from under the financial cloud. If you don't take advantage of large sums of money while you have them, then you aren't ever going to pay off your debt, and you will always stay in a state of living paycheck to paycheck. Sometimes it's all about smart thinking and planning, regardless of how much you hate the concept of it.

Learn more about this author, Clacky McSnackins.
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